What Is the Group of Seven (G-7)?
The Group of Seven (G-7) is a forum of the seven countries with the world's largest developed economies—France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada—whose government leaders meet annually on international economic and monetary issues. The Presidency of the G-7 is held by each of the member countries in turn. The European Union is sometimes considered an eighth member of the G-7, since it holds all the rights and responsibilities of full members except to chair or host the meeting.
Role of the Group of Seven (G-7)
The major purpose of the G-7 is to discuss and sometimes act in concert to help resolve, global problems, with a special focus on economic issues. The group has discussed financial crises, monetary systems, and major world crises such as oil shortages.
The G-7 has also launched initiatives to fund issues and relieve crises where it sees an opportunity for joint action. Those efforts include several aimed at debt relief for developing nations. In 1996, working with the World Bank, the G-7 launched an initiative for the 42 heavily indebted poor countries (HIPC), along with a Multilateral Debt Relief Initiative (MDRI), a 2005 pledge to cancel the International Development Association debt of countries that have gone through the MDRI program.
In 1997, the G-7 provided $300 million to the effort to build the containment of the reactor meltdown at Chernobyl. In 1999, the G7 decided to get more directly involved in "managing the international monetary system" by creating the Financial Stability Forum of major national financial authorities such as finance ministries, central bankers, and international financial bodies.
Birth of the Group of Seven (G-7)
The G-7 has its roots in an informal meeting of the finance ministers of France, Germany, the U.S., Great Britain, and Japan (the Group of Five) in the wake of the 1973 oil crisis. That, in turn, inspired French President Valéry Giscard d’Estaing to invite the leaders of those countries, plus Italy, to Rambouillet in 1975 for further discussions on global oil, this time with the country's leaders joining the finance ministers, an attendance roster that has endured.
The next year, Canada was invited to join the group and the first meeting with all G-7 nations, hosted by the United States, was held in Puerto Rico in 1976.
Expansion to G-8 (the Group of Eight)
The G-7 has responded as the global economy has evolved, including as the Soviet Union pledged to create an economy with freer markets and held its first direct presidential election in 1991. Following the 1994 G-7 meeting in Naples, President Boris Yeltsin held meetings with G-7 member countries, in what became known as the P-8 (Political 8). In 1998, after urging from leaders including U.S. President Bill Clinton, Russia was added to the G-7 as a full member, creating a formal G-8.
However, in 2014, Russia was suspended from the group after the annexation of Crimea and tensions in Ukraine. It remains out of the G-7, despite the 2018 call by President Donald Trump to re-admit Russia to the organization, saying "[t]hey threw Russia out. They should let Russia come back in, should have Russia at the negotiating table.”
Creation of the G-20
As developing nations began to represent a larger part of the global economy, the absence of a forum about international financial matters that included those emerging economies became more glaring.
In response, the G-20 was created in 1999, comprising all the members of the G-7 plus 12 additional countries and the European Union. As the economies and trade activity of markets such as China, Brazil, India, Mexico, and South Africa—G-20 members all—surge, many observers now see the G-20 as usurping much of the role and eminence once held by the G-7.